Publication - U.S. Solar Photovoltaic System Cost Benchmark: Q1 2018

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Title

U.S. Solar Photovoltaic System Cost Benchmark: Q1 2018

Publisher

National Laboratory of the U.S. Department of Energy (NREL)

Author

Ran Fu, David Feldman & Robert Margolis

Published in

November 2018

Abstract

This report benchmarks U.S. solar photovoltaic (PV) system installed costs as of the first quarter of 2018 (Q1 2018). The authors use a bottom-up method, accounting for all system and project-development costs incurred during the installation to model the costs for residential, commercial, and utility-scale systems.

In general, the authors attempt to model the typical installation techniques and business operations from an installed-cost perspective. Costs are represented from the perspective of the developer/installer; thus, all hardware costs represent the price at which components are purchased by the developer/installer, not accounting for preexisting supply agreements or other contracts.

Importantly, the benchmark also represents the sales price paid to the installer; therefore, it includes profit in the cost of the hardware, along with the profit the installer/developer receives, as a separate cost category. However, it does not include any additional net profit

, such as a developer fee or price gross-up, which is common in the marketplace. The authors adopt this approach owing to the wide variation in developer profits in all three sectors, where project pricing is highly dependent on region and project specifics such as local retail electricity rate structures, local rebate and incentive structures, competitive environment, and overall project or deal structures. Finally, our benchmarks are national averages weighted by state installed capacities.

URL

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